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Could 2024 Be the Year for DEXes and User-Friendly Dapps?

Last Updated December 20, 2023 3:51 PM
Josh Adams
Last Updated December 20, 2023 3:51 PM
Key Takeaways
  • As ever, 2023 has been an incredibly busy year for crypto.
  • Although, in a new report, Nansen have made some bold predicitions.
  • They include a potential all-time high for Bitcoin, and more intent-centric dApps.

As 2023 draws to a close, crypto firm Nansen Research has published its annual outlook report , detailing scenarios for the year ahead.

After a tumultuous 2022 that saw major exchanges and lenders collapse and a surprisingly fruitful 2023, the report strikes an optimistic tone about crypto’s prospects in 2024.

New All-Time Highs for Bitcoin?

The report lays out four potential economic scenarios for 2024, assigning probabilities and projected crypto price ranges to each. The “soft landing” scenario, with inflation declining without significant economic slowdown, is deemed most likely at 40-50% probability. 

This outlook sees Bitcoin (BTC) reaching new all-time highs. However, the report warns markets may be overly optimistic on the soft landing, ignoring risks of reaccelerating inflation or potential recession later in 2024.

Beyond market predictions, the report highlights several technology trends expected to shape crypto’s evolution. One prediction sees AI agents becoming primary blockchain users, enabled by advances in cryptography and token-based incentives. 

What Nansen’s Experts Think

Speaking to CCN, Sandra Leow, Senior Research Analyst at Nansen, explained there were still some concerns regarding how powerful AI agents can get. She said: “Currently, we are still in infant stages of AI development and we are still unsure of the potential AI holds within blockchains.

“The use of AI and blockchains can result in issues of ethics and regulation – who is responsible for the decisions made by these AI agents on the blockchain? Other issues that may arise are privacy concerns, if AI agents can process and execute transactions on behalf of users, and what happens if AI agents go against the users, which are all possible scenarios. Ultimately, these are all concerns that are completely valid, and should be looked into to prevent these issues from arising.”

Another highlights the rise of “intent-centric” applications that simplify and streamline complex DeFi interactions. One longstanding hope is that more user-focused applications will open the door to new waves of adoption. Among other things, that includes simpler and intuitive digital wallets.

Martin Lee, a data journalist at Nansen, told CCN:“The main focus areas that we covered in the report regarding UX are centered around products/technologies that weren’t fully built out yet in the past such as intents and account abstraction.

“However, progress has been made on both fronts. We expect 2024 to be the year where these concepts and ideas get implemented successfully as working products.”

2024: The Year for DEXes?

On the trading front, the report foresees decentralized exchanges finally making major inroads on centralized platforms. Drivers include expanding into new asset classes, tackling issues like MEV, and capturing value through native tokens. With strong incentives and expected market growth, DEX volumes could hit between 10% and 20% of the crypto derivatives market. This represents a major shift from the current range of 2% to 10%.

Lastly, the report issues a challenge to the dominance of Ethereum and its layer 2 rollup architecture. Noting Bitcoin’s preeminent trust and security, it asks why these attributes could not secure other financial use cases beyond transactions.

Projects leveraging Bitcoin’s reliability for NFTs, tokenized assets, and potential layer-2 infrastructure could lead a 2024 market rebound.

 

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